Bowman, W.H. v Redline Coaches P/L

[1994] FCA 136

136      97

JUDGMENT No. ........ ........ .. / ........ ....

IN THE FEDERAL COURT OF AUSTRALIA

TASMANIA DISTRICT REGISTRY	NO TI 3 of 1992
INDUSTRIATA DIVISION
B E T W E E N :

WAYNE HAROLD BOWMAN

Applicant

A N D :

REDLINE COACHES PTY LTD

COURT:	NORTHROP J
PLACE :	HOBART
m:	3 MARCH 1994

REASONS FOR JUDGMENT

view of the way the case was presented

without expressing any final view on the matter, I propose to
say a few words about this case before I make the order sought

by consent. It is important for the parties that the position

be made clear as far as the Court sees it.	I propose to do
that now.
is as follows:

Wayne Harold Bowman, as applicant, sought the imposition

of a penalty on the respondent, Redline Coaches Pty Limited,

for a breach of the Transport Workers (Passenger Vehicles)

Award 1984 ("the Award"). The proceeding was brought pursuant

to s178 of the Industrial Relations Act 1988. In addition,
the applicant sought recovery of amounts that the respondent
was required to pay him which were due to him but not paid.
The claim was based upon subsection 178(6) of the Act, which

"(6) Where, in a proceeding against an employer under

this section, it appears to the court concerned that an
employee of the employer has not been paid an amount that
the employer was required to pay under an award or order,
the court may order the employer to pay to the employee

the amount of the underpayment."

The applicant was employed by the respondent as a

passenger coach driver. His conditions of employment were
regulated by the Award. The applicant claimed that between
the period 21 February 1991 and 4 July 1992 the respondent
failed to pay him in total a sum of $3817.04, being wages and
overtime due to him under the provisions of the Award.
Eventually, the parties agreed that the sum of $2602 should be
paid by the respondent to the applicant as the amount of
underpayment of wages and overtime. This amount has been
paid, I understand, by the respondent to the applicant.

The question of penalty to be imposed upon the respondent

under subsection 178(4) of the Act remains to be determined.
On the facts of this case the maximum penalty that can be

imposed is $1000, it being accepted that subsection 178(2)

applies to the facts of this case.

The substantive issue arising at the hearing and opened

by counsel for the applicant yesterday was the application of

Clause 23(2) of the Award. This involved the proper

construction of that clause and its application to the facts
found. Clause 23 is headed "Payment of Wages". The clause
contains detailed provisions relating to the payment of "all
wages and overtime", at particular times called "the pay-day".
Subclause (c) reads:

"(c) If an employer fails to make payment to an employee as prescribed on pay-day, he shall pay to each such employee $11.80 for each and every day or part

thereof during which such default continues, unless
such failure is due to some act on the part of the
employee, or to circumstances not under his control
(that is the employer's control) and which he (that
is the employer) could not reasonably have foreseen,
and which he (that is the employer) took reasonable
steps to avoid or overcome."

The balance of the subclause is not relevant to the facts of this case.

It is noted that payment as prescribed refers to payment

for wages and overtime. It is noted further that the
specified amount of $11.80 is not a wage or overtime. Quite
clearly, on its face subclause (c), purports to impose a
penalty on an employer for a breach of an award provision
requiring payment of wages and overtime at a particular time,

namely on pay-day. This is the view of Wright J of the

Supreme Court of Tasmania expressed in Emmerton v m, 23

February 1994, unreported, where a similar clause contained in another award involving the Transport Workers Union was under consideration. At pages 9 and 10 of the reasons for judgment his Honour considers that clause 32(d) in that award. Included in that passage is the following:

"It will be noted at once that unlike the other
provisions of the Award which have been referred to
above, this provisions is directly penal in nature. It

is not a provision relating to remuneration properly so

called. "

I add, neither is it a provision relating to wages or overtime properly so called.

It has been typical to refer to the penalty as being a

penalty for waiting time, but that is completely misleading.
The word "waiting time" is not referred to in subclause 23(c).

It has nothing to do with waiting time. It is a penalty for a

breach of an award. The amount of the penalty can amount to
very large sums of money as illustrated in the present case
where the particulars given by the applicant show that for the
non-payment of wages and overtime amounting to $3817.04, the
amount of penalty which is being sought by the applicant
amounts to $308,705.70. That amount just needs to be
mentioned to illustrate the absurd results which would flow

from a literal application of subclause 23(c).

In this regard, the question arises as to whether the

subclause is an attempt to pre-empt the provisions of s178 of

the Act. The question of the validity of the subclause arise.

I mention these matters. They have not been argued before the Court for reasons which I shall mention in a moment, but a warning is given that attention should be directed to this question to determine whether the subclause can have legal effect in its present form where it purports to impose a penalty for a breach of an award apart altogether from the statutory provisions of s178 of the Industrial Relations Act.

This case raises also the question of the proper construction of subclause 23(c). There are great difficulties involved in this question.

When the case resumed its hearing this morning, the

parties announced that. agreement had been reached and the
matter was not to proceed. The Court was informed that there
was agreement as to the payment of money by the respondent to
the applicant on the claim, and that the Court would be asked
to consider and determine the amount of penalty to be imposed
on the respondent by reason of a breach of the Award under
subsection 178(4) of the Act. The Court raised the question
of the validity of the Award. The question of the validity
can be highlighted by the fact that in a normal contract, if
such a clause appeared, it would not be enforceable since on
no view can it be said to be a genulne pre-estimation of loss
to be suffered for a breach of a term of the contract. Apart
from that argument there is also the question whether
subclause 23(c) constitutes an industrial matter for the

purposes of the Industrial Relations Act.

Following discussions, counsel for the applicant

indicated that he was not pressing for the imposition of a
penalty on the respondent under the provisions of s178 of the
Industrial Relations Act.

In those circumstances, the Court is prepared to make the order by consent which is agreed to by the parties. The Court therefore makes the order, namely, that the respondent pay the applicant the sum of $15,000.

I certify that this and the preceding five (5) pages are a true copy of the Reasons for Judgment of The Honourable Mr Justice R.M. Northrop.

Associate:

Date: 1% m\ /%Lt.